Less social dialogue and more social change

– Andy Stern is the president of the Service Employees International Union. His views are his own –

We are living through the third economic revolution. The first was the agricultural revolution, and it took nearly 3,000 years. The second was the industrial revolution, which took about 300 years. This revolution is going to take 30 years. As we move from an industrial economy based in factories to a knowledge and finance economy that lives on the Internet, no generation of people has ever witnessed so much change in a single lifetime.

And this revolution is televised, it’s Googlized, it’s digitized, it’s in your face, on your screen, 24/7. It is relentless and it’s unending and it’s far from over.

The problem is this revolution is not working for the vast majority of the world’s citizens.

Despite the exponential increases in productivity and profits that have resulted from the globalization of our markets and economies, nearly half the world’s population lives on less than $2.50 per day. The richest 20 percent of the world’s people earn 86 percent of the income, consume 80 percent of the resources, and create 83 percent of the waste.

This is an unsustainable model, and we are seeing the cracks in the system each day.

It is a humbling and mind-opening moment for those whose wholesale embrace of a privatizing, deregulating, free-market-worshiping ideology has put us on the fast track to global financial collapse. Financial manipulation, greed and deregulation have led to economic havoc.

The majority of consumers have little or no spending power, and the way forward gets murkier each day. It may sound a little old fashioned, but workers of the world need a raise. If workers don’t gain greater purchasing power, we’ll never get out of this recessionary spiral.

And that means a hard look at our business models and values before it’s too late.

This is not a time for more image polishing codes, charitable activity or more conferences; it’s time for changes in reality. It is time for straight talk; for new values, new business models, new thinking, and most importantly bold action.

Ten years ago, the International Labour Organization (ILO) issued its Declaration on Fundamental Principles of Rights at Work. The United Nations (UN) Global Compact followed two years later, which more than 4,700 businesses and stakeholders have signed onto voluntarily. Their commitment? Among other things:

· Upholding the freedom of association and the effective recognition of the right to collective bargaining (Principle 3),

· The elimination of all forms of forced and compulsory labor (Principle 4), and

· The elimination of discrimination in respect of employment and occupation (Principle 6).

And yet, little has changed for the workers they employ.

Despite laws that guarantee a day of rest, it is not uncommon for workers to go for months without a day off in the global security industry. Likewise, a recent survey of labor rights compliance in the supply chains of large apparel industry brands found workers subject to forced overtime on a routine basis in 94 percent of the factories surveyed. In an equal number of cases, the workers’ right to organize and bargain was not respected. In 2006 the International Trade Union Confederation (ITUC) found nearly 5,000 cases of workers in Asia who were fired for exercising their right to association. The list of infractions goes on and on.

The bottom line: voluntary codes are not enough. The impressive social dialogue and lofty rhetoric of recent years appears to have amounted to little more than an image airbrushing for corporations like Nike and other signatories of the UN Global Compact. And while an airbrush may sell more sweaters and products, it doesn’t lift a working family out of poverty.

For our global economy to thrive and grow again, corporations, governments, and non-state actors (like labor unions) must work together towards a system where competition is based on the quality and sustainability of goods and services provided—not by a race to lower costs at the expense of workers, the environment, and product quality. We created global trade, global finance, global corporations, but no global multi-lateral regulation, oversight or enforcement.

Too often, in the global economy, companies—not countries—are making the rules of the global economy.

To maintain a level playing field, standards and regulations must be set and enforceable by independent entities evenly across industries and up-and-down supply chains. The ILO and UN agreements are a good start, but with no external enforcement processes or grievance mechanisms, they remain toothless, and need to be updated or replaced with binding agreements that include an independent, third-party monitor vested with the power to direct a remedy.

This is not only possible; it’s been done. Union Network International (UNI) and two of the world’s largest employers in the property services industry forged such agreements in the past year. In June 2008, UNI and cleaning giant ISS signed a comprehensive compact guaranteeing the employer’s 440,000 employees the freedom to unite on the job if they so choose. They also established a jointly-managed fund aimed at monitoring and raising standards in specific markets. In December 2008, UNI forged a similar agreement with UK-based G4S, the largest private security group and the second largest private sector, multi-national employer in the world.

Improvements in employment conditions and wages negotiated by local unions after these agreements are already having a positive effect on the companies’ employees, their families, and the communities in which they live and work, as well as the property services sector overall. Such compacts, with the possibilities of comprehensive (rather than issue by issue) agreements between NGOs and corporations, offer hope in—as well as a model for—dealing with our current global economic crisis.

With the philosophy of unfettered-greed-as-king being deflated by reality, and with a new president at the helm in the United States who respects the market but does not worship it, the time is ripe for change.

We won’t reverse the worldwide financial meltdown in five short days in Davos. But what we can do—what I hope we do—is to acknowledge the failure of the free market to magically solve all of our problems, and set to work together addressing the challenges and embracing the opportunities this current economic moment holds.